MNI: Canada Retail Sales Improve in December

Canadian December retail sales increased by 0.5%, the federal statistics office said Tuesday, less than its earlier 0.7% flash estimate but matching economist forecasts.

The rise in retail sales was driven by motor vehicles and part dealers, up 3.8%. Core retail sales that exclude auto parts and gasoline increased 0.4%.

Additionally, retail sales rose 7.3% in the 12 months through December, much faster than the overall economy's growth. Consumer spending has been supported by unemployment remaining near historic lows and money saved from COVID-19 relief checks.

Consumers may still be hurt by the 425 bps of interest-rate hikes over the last year. Bank of Canada Deputy Paul Beaudry last week said there must be a "sufficiently strong policy response" to ensure that expectations do not "drift away from the Bank’s inflation target."